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A court injunction stopping the Kasich administration from completing contracts with five health
plans selected to manage care for Medicaid patients was lifted yesterday. The Franklin County Court
of Appeals ruled in a 2-1 decision against an insurer challenging how the state evaluated and
scored bids for those contracts.

The appeals court ruled that Amerigroup Ohio Inc. “has not alleged sufficient facts to state a
claim for an abuse of discretion” in a lawsuit it filed charging that the Kasich administration’s
decision process was flawed in picking contracts worth billions of dollars. The move would shift
thousands of poor and disabled Ohioans into managed care. The dissenting judge was Judge Judith L.
French, whom Gov. John Kasich recently appointed to the Ohio Supreme Court.

After initially identifying five health plans out of 11 that applied to receive contracts in
April, the state reversed its decision and decided to rescore the bids, resulting in two of the
original winners being stripped of contracts and two other companies getting them instead.
Amerigroup didn’t win a contract in either round. It ranked last in April and moved up to sixth
when the contracts were re-awarded in June.

One of the companies that lost a contract it had initially won in April — Aetna Better Health
Inc. of New Albany — sued the state’s Department of Job and Family Services in June, but the
lawsuit was thrown out by Franklin County Common Pleas Judge Richard S. Sheward.Amerigroup then
challenged Sheward’s ruling in the appeals court, keeping in place an injunction that had prevented
the state from completing the contracts for months.

“Today’s ruling reaffirms what has been our position all along — that our selection process was
fair, transparent and objective throughout,” Ohio Medicaid director John McCarthy said in a
statement. “We now look forward to finalizing agreements and working with the five selected
managed-care plans to further transform Medicaid in Ohio.”

Representatives of Amerigroup did not return phone messages seeking comment. The company has 45
days to file an appeal with the Ohio Supreme Court, according to a spokesman for the state’s
Medicaid office.

Ohio hopes to trim $1.5 billion over the next two years from the tax-funded Medicaid program
through a series of changes, including new managed-care contracts to serve about two-thirds of
enrollees.